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Canadia targets home loans

Bank to lend as much as $95m to property sector this year, vice president says

The most important thing is the quality of the customers and ... cash flows...."

CANADIA Bank says it is set to increase housing loans by up to 20 percent this year, but other banks said they would remain cautious towards the sector following a difficult lending year in 2009, in which bad loans rose and property financing dried up.

“We are looking into an increased housing market for end-users and have a budget set aside of about [US]$90 to $95 million for housing loans in 2010, from $79 million last year,” said Dieter Billmeier, vice president of Canadia Bank, adding that he was confident Cambodia would see double-digit growth in property financing this year.

Canadia plans to lend about $450 million overall in 2010, he said, with commercial loans forecast to make up 60 percent of the total.

“We are looking into the sectors of agriculture, services – including tourism and retail – and wholesale lending,” he said, emphasising flexibility over a fixed weighting to different sectors of the economy.

ANZ Royal did not have a specific lending target for this year, CEO Stephen Higgins told the Post, adding that loan disbursement would depend on customer demand.

“We have the resources to lend a significant amount to the right customers. We are focusing on a range of sectors, including agribusiness, wholesale and retail trade,” he wrote in an email Thursday. “But the most important thing is the quality of the customers and the cash flows they generate.”

Higgins reiterated that ANZ Royal was about to resume lending for private mortgages but that the lender had “a low appetite for commercial real estate”, a sector that was hit hard as the economic crisis struck the Kingdom in the last quarter of 2008.

ACLEDA Bank would maintain low involvement in the property lending sector for the remainder of the year because the sector was of low importance within the bank’s overall strategy, according to Senior Vice President In Siphann.

“Lending to the real estate sector is not our target, our main targets are sectors serving productivity and agriculture,” he said, adding that last year the bank lent $538 million overall, of which 43 percent – or $235 million – went to trade, 20 percent – or $110 million – was to services and $85 million to agriculture.

Only 1.3 percent, or $7 million, was lent for commercial real estate last year, said In Siphann, with a further 8.5 percent, or $46 million, for housing loans.

This year “we plan to increase our loans – about 30 percent to $699 million, mainly to trade and services as well as agriculture”, he said, adding that ACLEDA would also remain mostly versatile in regards to targeting different sectors depending on customer quality and demand.

But “for real estate and housing loans, we will cap ourselves at less than 15 percent of total lending for this year”.

With almost no real estate investments taking place, Keuk Narin, general manager of Bonna Realty Group, said property remained an unattractive sector in which to invest with little growth.

Since the start of this year, transactions have increased, he said, “but prices were about 50 percent down on those in the first half of 2008 when the sector was booming”.

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